Looks like the assumptions about Northwest doing a deal for Midwest were true.
Friday, AirTran’s offer for Midwest was set to officially expire, but officials then had said AirTran would wait until Monday before making a final decision on an extension or change of the offer. Or a removal of the offer.
Tonight, it looks like AirTran is out, and Northwest is in, along with some help from a familiar source — TPG.
According to a release issued late tonight, Northwest Airlines has confirmed it is a passive investor in the acquisition entity that TPG has created to pursue an acquisition of all of the outstanding shares of Midwest Air Group, Inc. at $16 per share. The bid submitted by TPG is subject to the satisfaction of “certain conditions.” Total value of the offer is roughly $400 million.
The TPG offer was presented to the Midwest Air Group board of directors today.
According to the release, NWA, which is providing financing to facilitate the transaction, will not participate in the management or control of Midwest should TPG acquire Midwest. The previously announced codeshare agreement between NWA and Midwest Airlines will remain in place and the two airlines will explore cost reduction activities such as joint fuel purchasing.
And the most important part, from what we understand — Midwest CEO Tim Hoeksema gets to stay put as the head of the new privately-held entity.
If this deal goes through, and at this point, I don’t see why it won’t, this will be the second major merger strike out for AirTran and Joe Leonard. Three years ago the airline lost out to Southwest Airlines as they sought a potential deal with ATA.
And, as expected, Joe Leonard is not going down without a fight. Today he was quoted in the Milwaukee Journal-Sentinel.
“Leonard said AirTran’s purchase of Midwest Air would have resulted in a big increase in air travel from Milwaukee’s Mitchell International Airport, as well as a major surge in local hiring for the airline.”
According to Leonard, “Instead, the Midwest board has chosen a path that will benefit current senior management by selling out to a private equity firm and a so- called ‘passive’ investor whose involvement will surely raise antitrust concerns, casting doubt for shareholders on whether a transaction can, in fact, close,” Leonard said, referring to Northwest’s involvement.”
He continued, “Furthermore, private equity investors are laser focused on generating short-term returns and the only way to accomplish that goal is to slash costs by cutting back on service and eliminating jobs,” Leonard said. “If the Midwest board is successful in selling the company to a private equity investor, the Midwest employees should be concerned about their job security and Midwest’s customer service is sure to suffer.”
Reports tonight say a formal agreement is expected to be announced by Wednesday.
Tickers: (AMEX:MEH), (NYSE:NWA), (NYSE: AAI)
Technorati Tags: airline CEOs, airlines, AirTran, Midwest Airlines, Northwest Airlines, TPG
Interesting that “Forklift Joe” should all of a sudden be worried about jobs as when he was at Eastern he was quoted as saying to a would be manager “you can’t stomach what we are going to do to the pilots”. And I remember Bob Fornaro addressing Northwest employees saying that Northwest would always be a loser because it isn’t big in New York or Los Angeles (then whey did he come to work here?). Fornaro is the “genius” that created the Northwest “hub” in DCA and “shuttle” between DCA-BOS. I remember carrying 7 passengers DCA-TPA over Christmas that year! Finally Dasburg, he of the $90 million payout who took a billion dollar strike/lockout that could have been settled for 750 million on the advice of Micky “Frank Lorenzo is the greatest man I ever worked for” Foret and Ben Hirst, returning to NW to “make peace with employees!??”, asked Fornaro what marketing data prompted him to open the DCA hub. His answer was something like he didn’t need any marketing data, anybody “knows” that DCA is a better market than anything located between the Atlantic and Pacific oceans. So Fornaro and Leondard were fired from Northwest and I can’t help but think the NW investent in Midwest is as much “payback” as protecting the upper midwest market from a fare war. And of course NW has a long standing relationship with Bonderman at TPG.
And “Delete Pete” Moore, managing director of flying at Northwest (pilots at Northwest don’t rate a VP, Pete’s boss is a former ramper with an MBA who wouldn’t know an airplane if it ran over him but is building a house on Maui with his “bonus”) who has said what a “great airline” Northwest will be after bankruptcy, is “retiring” after only 23 yrs of service (full penison requires 25 yrs) to “pursue other opportunities”. Rumors are rumors but I wouldn’t want to work at a certain airline closing it’s DTW crew base if Pete is gonna be the new boss.
By the way, Steenaland called Steve Zoller last week (our ALPA board rep) trying to claim the the sick call increase of 25 pilots in July 07 vs 06 caused the cancellation of 2000 flights!! I’d like to see a way even under the worst contract in ALPA that 25 pilots, even in the right seats, could operate 2000 flights in only the last 10 days of the month!!
Cheers,
Ron Henning
Interesting that “Forklift Joe” should all of a sudden be worried about jobs as when he was at Eastern he was quoted as saying to a would be manager “you can’t stomach what we are going to do to the pilots”. And I remember Bob Fornaro addressing Northwest employees saying that Northwest would always be a loser because it isn’t big in New York or Los Angeles (then whey did he come to work here?). Fornaro is the “genius” that created the Northwest “hub” in DCA and “shuttle” between DCA-BOS. I remember carrying 7 passengers DCA-TPA over Christmas that year! Finally Dasburg, he of the $90 million payout who took a billion dollar strike/lockout that could have been settled for 750 million on the advice of Micky “Frank Lorenzo is the greatest man I ever worked for” Foret and Ben Hirst, returning to NW to “make peace with employees!??”, asked Fornaro what marketing data prompted him to open the DCA hub. His answer was something like he didn’t need any marketing data, anybody “knows” that DCA is a better market than anything located between the Atlantic and Pacific oceans. So Fornaro and Leondard were fired from Northwest and I can’t help but think the NW investent in Midwest is as much “payback” as protecting the upper midwest market from a fare war. And of course NW has a long standing relationship with Bonderman at TPG.
And “Delete Pete” Moore, managing director of flying at Northwest (pilots at Northwest don’t rate a VP, Pete’s boss is a former ramper with an MBA who wouldn’t know an airplane if it ran over him but is building a house on Maui with his “bonus”) who has said what a “great airline” Northwest will be after bankruptcy, is “retiring” after only 23 yrs of service (full penison requires 25 yrs) to “pursue other opportunities”. Rumors are rumors but I wouldn’t want to work at a certain airline closing it’s DTW crew base if Pete is gonna be the new boss.
By the way, Steenaland called Steve Zoller last week (our ALPA board rep) trying to claim the the sick call increase of 25 pilots in July 07 vs 06 caused the cancellation of 2000 flights!! I’d like to see a way even under the worst contract in ALPA that 25 pilots, even in the right seats, could operate 2000 flights in only the last 10 days of the month!!
Cheers,
Ron Henning
Interesting that “Forklift Joe” should all of a sudden be worried about jobs as when he was at Eastern he was quoted as saying to a would be manager “you can’t stomach what we are going to do to the pilots”. And I remember Bob Fornaro addressing Northwest employees saying that Northwest would always be a loser because it isn’t big in New York or Los Angeles (then whey did he come to work here?). Fornaro is the “genius” that created the Northwest “hub” in DCA and “shuttle” between DCA-BOS. I remember carrying 7 passengers DCA-TPA over Christmas that year! Finally Dasburg, he of the $90 million payout who took a billion dollar strike/lockout that could have been settled for 750 million on the advice of Micky “Frank Lorenzo is the greatest man I ever worked for” Foret and Ben Hirst, returning to NW to “make peace with employees!??”, asked Fornaro what marketing data prompted him to open the DCA hub. His answer was something like he didn’t need any marketing data, anybody “knows” that DCA is a better market than anything located between the Atlantic and Pacific oceans. So Fornaro and Leondard were fired from Northwest and I can’t help but think the NW investent in Midwest is as much “payback” as protecting the upper midwest market from a fare war. And of course NW has a long standing relationship with Bonderman at TPG.
And “Delete Pete” Moore, managing director of flying at Northwest (pilots at Northwest don’t rate a VP, Pete’s boss is a former ramper with an MBA who wouldn’t know an airplane if it ran over him but is building a house on Maui with his “bonus”) who has said what a “great airline” Northwest will be after bankruptcy, is “retiring” after only 23 yrs of service (full penison requires 25 yrs) to “pursue other opportunities”. Rumors are rumors but I wouldn’t want to work at a certain airline closing it’s DTW crew base if Pete is gonna be the new boss.
By the way, Steenaland called Steve Zoller last week (our ALPA board rep) trying to claim the the sick call increase of 25 pilots in July 07 vs 06 caused the cancellation of 2000 flights!! I’d like to see a way even under the worst contract in ALPA that 25 pilots, even in the right seats, could operate 2000 flights in only the last 10 days of the month!!
Cheers,
Ron Henning